1. Seems wave 4 ended at the expected area 1220-40 yesterday and we are entering wave 5 down today. It will be quick and dirty and the max downside is to be around the 1100 level but I rather think the weakest markets will be the European rather again. – they may indeed make new lows. On the other hand the MAs on the ISE have reached the same level like March 2008 which created a 2 month 10% rally before the big crash started and around last summer. what I am saying is that we will have to shake off the very bearish current sentiment and that will take a few weeks before what also astro pattern confirms the 2nd part of Q4 will bring an ugly downmove. Back in 2008 we had the same monthly sell signal by price pattern and at some point like in 2008 some banks will bring the trouble again upon us thanks to the morons in all governments around the world who have done nothing.
Equity markets are starting to catch on to the fixed income market’s signals as hopes of QE3 are slowly extinguished.
Rather interestingly to many of us, the ‘pattern of misconduct and negligence’ by Goldman Sachs’ residential mortgage loan servicing sub Litton, has actually been pressed by The Fed. It seems in the short-term, this was the straw to break the ebullient camel’s back of the equity market as XLF drops 2% on the day and GS was down around 3% before bouncing back a little. It certainly seems that the TBTF premium is wearing away rapidly from these once impregnable fortresses of misinformation as both equity and credit markets downgrade them.